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OCE - Oceana Group Limited - The unaudited results of the group for the six
months ended 31 March 2008 are set out herein.
OCEANA GROUP LIMITED
Incorporated in the Republic of South Africa
(Registration Number 1939/001730/06)
JSE Share Code: OCE
ISIN Number: ZAE000025284
NSX Share Code: OCG
INTERIM REPORT AND DIVIDEND DECLARATION FOR THE SIX MONTHS ENDED 31 MARCH 2008
The unaudited results of the group for the six months ended 31 March 2008 are
set out herein.
This report has been prepared in compliance with International Financial
Reporting Standards (IFRS) applicable to Interim Financial Reporting (IAS34) and
in accordance with the principles applied in the most recently published Annual
Financial Statements.
Directors:
MA Brey (Chairman), RA Williams (Vice Chairman), AB Marshall* (Chief Executive
Officer), ABA Conrad*, NP Doyle, Z Fuphe, RG Nicol*, S Pather, F Robertson
(*Executive)
Company Secretary: JD Cole
Registered Office: 16th Floor, Metropolitan Centre, 7 Coen Steytler Avenue, Cape
Town 8001
Transfer Secretaries: Computershare Investor Services 2004 (Pty) Limited
70 Marshall Street, Johannesburg, 2001
(P.O. Box 61051, Marshalltown, 2107)
Sponsor: The Standard Bank of South Africa Limited
CONDENSED GROUP INCOME STATEMENT Unaudited Audited
six months ended year ended
31 March 30 Sept
2008 2007 Change 2007
Note R`000 R`000 % R`000
Revenue 1,303,241 1,136,345 15 2,608,894
Operating profit before
abnormal items 102,770 66,312 55 236,723
Abnormal items 1 (497) 2,962 2,549
Operating profit 102,273 69,274 48 239,272
Dividends received and accrued 9,075 7,816 15,922
Net interest received 5,903 5,334 11,181
Profit before taxation 117,251 82,424 42 266,375
Taxation 39,989 27,091 48 85,869
Profit after taxation 77,262 55,333 40 180,506
Attributable to:
Shareholders of Oceana Group Ltd 74,749 51,564 45 168,805
Outside shareholders in
subsidiaries 2,513 3,769 (33) 11,701
77,262 55,333 40 180,506
Weighted average number of
shares on which earnings per
share are based (000`s) 2 98,686 100,764 100,866
Adjusted weighted average
number of shares on which
diluted earnings per share
are based (000`s) 99,623 100,921 101,017
Earnings per share (cents)
Basic 75.7 51.2 48 167.4
Diluted 75.0 51.1 47 167.1
Dividends per share (cents) 26.0 19.0 37 106.0
Headline earnings per share (cents)
Basic 76.2 46.7 63 162.4
Diluted 75.5 46.6 62 162.2
DIVIDEND DECLARATION
Notice is hereby given that an interim dividend No. 129 of 26 cents per share,
in respect of the year ending 30 September 2008, was declared on Thursday 8 May
2008. Relevant dates are as follows:
Last day to trade cum dividend - Friday 27 June 2008
Commence trading ex dividend - Monday 30 June 2008
Record date - Friday 4 July 2008
Dividend payable - Monday 7 July 2008
Share certificates may not be dematerialised or re-materialised between
Monday 30 June 2008 and Friday 4 July 2008, both dates inclusive.
By order of the board
JD Cole Secretary
8 May 2008
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
Unaudited Audited
six months ended year ended
31 March 30 Sept
2008 2007 2007
R`000 R`000 R`000
Balance at the beginning of the period 905,522 818,830 818,830
Shares issued 8,576 11,893 16,087
Increase in treasury shares (52,280) (36,740) (36,805)
Movement on foreign currency
translation reserve 15,315 1,423 2,332
Gain on cash flow hedges 6,734
Recognition of share-based payments 4,148 2,688 5,634
Profit after taxation 77,262 55,333 180,506
Loss on sale of treasury shares (25) (26) (46)
Dividends declared (98,093) (61,968) (81,016)
Balance at the end of the period 867,159 791,433 905,522
Comprising:
Share capital and premium 98 138 4,267
Foreign currency translation reserve 40,665 24,441 25,350
Hedging reserve - forward exchange
contracts 6,734
Share-based payment reserve 20,966 13,920 16,818
Capital redemption reserve 130 90 130
Distributable reserves 774,685 726,805 824,938
Outside shareholders interest 23,881 26,039 34,019
Total 867,159 791,433 905,522
CONDENSED GROUP BALANCE SHEET
Unaudited Audited
31 March 30 Sept
2008 2007 2007
R`000 R`000 R`000
Assets
Non-current assets 462,802 490,911 460,724
Property, plant and equipment 262,731 299,820 273,413
Goodwill 25,525 22,434 22,830
Fishing rights and trademarks 36,167 36,015 32,682
Deferred taxation 9,340 13,174 10,438
Investments and loans 129,039 119,468 121,361
Current assets 831,510 765,065 1,041,655
Inventories 294,782 249,738 312,470
Accounts receivable 386,469 352,905 412,073
Non-current assets held for sale 1,100 602
Cash and cash equivalents 150,259 161,322 316,510
_______ _______ _______
Total assets 1,294,312 1,255,976 1,502,379
Equity and liabilities
Capital and reserves
Share capital and premium 98 138 4,267
Foreign currency translation reserve 40,665 24,441 25,350
Hedging reserve - forward exchange
contracts 6,734
Share-based payment reserve 20,966 13,920 16,818
Capital redemption reserve 130 90 130
Distributable reserves 774,685 726,805 824,938
Interest of own shareholders 843,278 765,394 871,503
Interest of outside shareholders 23,881 26,039 34,019
Total equity 867,159 791,433 905,522
Non-current liabilities 40,304 33,119 39,584
Liability for share-based payments 9,116 2,517 6,999
Deferred taxation 31,188 30,602 32,585
Current liabilities 386,849 431,424 557,273
Accounts payable and provisions 343,418 368,356 459,132
Bank overdrafts 43,431 63,068 98,141
Total equity and liabilities 1,294,312 1,255,976 1,502,379
Number of shares in issue net of
treasury shares (000`s) 98,209 99,971 100,278
Net asset value per ordinary share (cents)859 766 869
Total liabilities excluding deferred
taxation: Total equity (%) 46 55 62
Total borrowings: Interest of own
shareholders (%) 5 8 11
CONDENSED GROUP CASH FLOW STATEMENT
Unaudited Audited
six months ended year ended
31 March 30 Sept
2008 2007 2007
R`000 R`000 R`000
Cash flows from operating activities
Operating profit before abnormal
items 102,770 66,312 236,723
Adjustment for non-cash items 34,650 33,328 78,423
Operating cash flows before working
capital changes 137,420 99,640 315,146
Working capital changes (71,991) (20,739) (44,475)
Cash generated from operations 65,429 78,901 270,671
Interest and dividends received 11,529 11,118 24,472
Interest paid (2,990) (3,167) (8,675)
Taxation paid (50,693) (33,167) (74,378)
Dividends paid (98,093) (64,080) (83,128)
Net cash (outflow)/inflow from
operating activities (74,818) (10,395) 128,962
Cash inflow /(outflow) from investing
activities 3,268 5,330 (700)
Capital expenditure (17,745) (13,792) (28,041)
Proceeds on disposal of property,
plant and equipment 57 1,236 1,854
Net movement on loans and advances (1,238) 5,708 14,291
Disposal of businesses 22,194 7,830 7,830
Disposal of fishing rights 3,366 3,366
Cash related abnormal items and other 982
Net cash flows applied to
financing activities (41,810) (22,338) (33,286)
Proceeds from issue of share capital 8,576 11,894 16,087
Proceeds on sale of treasury shares 27
Acquisition of treasury shares (52,304) (36,794) (36,805)
Short-term borrowings raised /(repaid)1,918 2,535 (12,568)
Net(decrease)/increase in cash
and cash equivalents (113,360) (27,403) 94,976
Cash and cash equivalents at the
beginning of the period 218,369 126,721 126,721
Effect of exchange rate changes 1,819 (1,064) (3,328)
Cash and cash equivalents at the
end of the period 106,828 98,254 218,369
CONDENSED GROUP SEGMENTAL REPORT
Unaudited Audited
six months ended year ended
31 March 30 Sept
2008 2007 2007
R`000 R`000 R`000
Revenue
Inshore fishing 783,331 620,011 1,409,041
Midwater and deep-sea fishing 445,681 458,006 1,023,667
Commercial cold storage 74,229 58,328 176,186
_______ ________ ________
Total 1,303,241 1,136,345 2,608,894
Operating profit before abnormal items
Inshore fishing 28,649 12,616 105,862
Midwater and deep-sea fishing 52,933 43,440 73,587
Commercial cold storage 21,188 10,256 57,274
_______ ________ _______
Total 102,770 66,312 236,723
Total assets
Inshore fishing 650,020 571,650 604,834
Midwater and deep-sea fishing 203,824 228,257 280,829
Commercial cold storage 151,830 162,105 168,407
Financing 279,298 _ 280,790 437,871
1,284,972 1,242,802 1,491,941
Deferred taxation 9,340 13,174 10,438
Total 1,294,312 1,255,976 1,502,379
Total liabilities
Inshore fishing 217,108 256,163 293,596
Midwater and deep-sea fishing 105,596 85,726 135,320
Commercial cold storage 26,676 20,825 35,979
Financing 46,585 71,227 99,377
395,965 433,941 564,272
Deferred taxation 31,188 30,602 32,585
Total 427,153 464,543 596,857
NOTES
Unaudited Audited
six months ended year ended
31 March 30 Sept
2008 2007 2007
R`000 R`000 R`000
1. Abnormal items
Impairment loss on Australian lobster
fishing rights (1,476) (2,035) (6,223)
Provision in respect of utilisation of
pension fund surplus (403) (1,164) (1,514)
Profit on disposal of businesses 1,382 7,160 7,920
Foreign exchange profit on reduction of
investment in subsidiary 1,652 1,652
Net loss on disposal of property, plant
and equipment (64)
Impairment loss on vessels and equipment (2,651) (1,839)
Impairment of non-current asset held
for sale (1,750)
Reversal of prior year`s loan provision
in Namibian whitefish business 5,547
Provision for irrecoverable loans _____ _____ (1,180)
Abnormal(loss) / profit before taxation (497) 2,962 2,549
Taxation (242) 628 928
Abnormal(loss)/ profit after taxation (739) 3,590 3,477
Number Number Number
of shares of shares of
shares
`000 `000 `000
2. Elimination of treasury shares
Weighted average number of shares
in issue 117,587 116,689 116,796
Less: treasury shares held by
share trusts (14,387) (14,383) (14,388)
Less: treasury shares held by
subsidiary company (4,514) (1,542) (1,542)
Weighted average number of shares on
which earnings per share and headline
earnings per share are based 98,686 100,764 100,866
R`000 R`000 R`000
3. Determination of Headline Earnings
Profit after taxation attributable to
own shareholders 74,749 51,564 168,805
Adjusted for:
Impairment loss on Australian lobster
fishing rights 1,476 2,035 6,223
Profit on disposal of business (1,027) (7,161) (7,852)
Foreign exchange profit on reduction
of investment in subsidy (1,172) (1,172)
Net loss / (surplus) on disposal of
property, plant and equipment 8 (114) (349)
Impairment loss on vessels & equipment 1,881 1,305
Impairment of non-current asset held
for sale 1,243
Reversal of prior year`s loan provision
in Namibian whitefish business (5,547)
Provision for irrecoverable loans 1,180
Headline earnings for the year 75,206 47,033 163,836
Unaudited Audited
six months ended year ended
31 March 30 Sept
2008 2007 2007
R`000 R`000 R`000
4. Dividends
Estimated dividend declared
after reporting date 25,534 18,995 87,242
Dividend on treasury shares acquired
prior to last day to trade (2,275)
Dividend on shares issued prior
to last day to trade 53 475
Actual dividend declared after reporting date 19,048 85,442
5. Supplementary information
Cost of sales 942,988 808,350 1,773,442
Depreciation 28,406 29,367 67,399
Operating lease charges 8,704 9,397 18,208
Foreign exchange profit (9,117) (666) (5,308)
Capital expenditure 17,745 13,792 28,041
Expansion 3,323 492
Replacement 14,422 13,792 27,549
Capital commitments 135,328 35,536 85,474
Contracted 112,880 7,177 8,436
Not contracted 22,448 28,359 77,038
COMMENTS
Financial Results
Revenue for the six months ended 31 March 2008 increased by 15% compared with
the first half of the previous year and operating profit before abnormal items
by 55%. The major contributing factors to the improved margins were increased
sales of canned fish, improved export realisations and higher cold store
occupancy levels.
Headline earnings per share for the six months increased by 63% and earnings per
share by 48%. The differential between the increase in headline earnings per
share and earnings per share is mainly due to the inclusion of the profit on
disposal of the abalone business in the prior year.
The weighted average number of shares in issue was reduced by the specific
repurchase of 2.6 million shares. This contributed to higher earnings on a per
share basis.
An interim dividend of 26 cents per share has been declared (2007: 19 cents per
share).
Review of operations
Inshore Fishing
The 2008 Total Allowable Catch (TAC) for pilchard is 90 776 tons (2007: 162 436
tons). Pilchard landings to date have been disappointing and although yields
have been good, canned fish production was well below prior year levels. The
Namibian pilchard TAC was recently announced as 15 000 tons (2007: 15 000 tons)
and fishing should commence later this month.
Sales volumes of canned fish increased mainly due to substantial quantities of
imported product as well as stock carried over from the previous fishing season
in Namibia. Although there continues to be a shortage of supply of canned fish
to the domestic market, Lucky Star`s market share recovered appreciably as a
result of the imports.
Margins improved at Glenryck UK on good sales of canned pilchard and salmon
products.
Overall, the canned fish operations made a satisfactory profit compared to an
operating loss in the same period last year.
Fish meal operations recorded a loss for the six months due to lower export
selling prices and higher production costs which were impacted by rising energy
prices. Landings of red eye herring were higher but reduced cannery pilchard
offal resulted in overall production volumes in line with the comparative
period. The anchovy A season TAC for 2008 is 247 500 tons (2007: 386 942 tons)
which is mostly landed in the winter months.
The TAC for west coast lobster was reduced to 2 571 tons (2007: 2 856 tons).
Quota available to Oceana amounts to 374 tons (2007 actual catch: 550 tons).
Lobster catch rates in certain areas were lower than the prior year and resulted
in higher production costs per unit. Sales volumes were in line with the prior
year. Higher export prices and the benefit of a weaker rand exchange rate,
resulted in improved profitability.
Squid catches from own vessels were above those of last year, whilst volumes
handled on an agency basis were lower. Market prices were higher in euro and
rand terms resulting in a good increase in operating profit.
Midwater and Deep-sea Fishing
Horse mackerel catches in Namibia were well below prior year as a result of the
non-availability of chartered vessels pursuant to their extended arrest by the
Ministry of Fisheries and Marine Resources. Vessel costs per ton of fish caught
increased, driven by higher fuel prices, labour costs and interrupted trips
whilst selling prices increased as a result of the lower volumes available from
Namibia. In South Africa Oceana`s midwater trawler continued to perform well and
the export market remained firm. Horse mackerel volumes sourced from external
fleets increased significantly and good margins were realised.
Overall operating profit from horse mackerel was higher than last year.
An agreement has been concluded for the purchase of an additional midwater
trawler. The investment including refurbishment costs amounts to R67 million.
The vessel will be based in Namibia and is expected to be operational towards
the end of the financial year.
Results from hake operations showed an improvement mainly as a consequence of
higher prices and the rand exchange rate.
The tuna business was sold with effect from 27 January 2008.
Cold Storage
The cold storage division experienced much higher occupancies in most stores
including those which were recently expanded whilst handling activity levels
were in line with the comparative period. Operating profit increased
substantially.
Directorate
On 7 February 2008 Mr N Dennis resigned from the board.
Prospects
Headline earnings for the full year are expected to exceed those of last year.
However, second half earnings growth will be at a much lower rate than that of
the first half.
On behalf of the board.
MA Brey AB Marshall
Chairman Chief Executive Officer
8 May 2008
Date: 08/05/2008 13:43:02 Supplied by www.sharenet.co.za
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